What is the difference and applicability of : DA / VDA / IDA? - CiteHR

What is the difference and applicability of : DA / VDA / IDA?
From India , Pune
Ceo-usd Hr Solutions
Swaraj Kumar
Statutory Compliance, Recruitment, Payroll
Nagarkar Vinayak L
Hr And Employee Relations Consultant

Dearness Allowance may be broadly classified into two category - Fixed DA (FDA) and Variable DA (VDA). VDA is followed by the majority organizations in India which is reviewed based on Consumer Price Index (CPI) periodically. Review of VDA period varies from organizations to organizations which may be monthly, qtrly, half yearly or yearly. There are different methods of neutralization of CPI index increase or decrease - % neutralization, per point CPI multiplied by certain money value neutralization, Pay scale slabs and VDA neutralization ( % or per point money value) etc. etc.

In India there are several VDA schemes in Govt sector as well as Private sectors. Consideration of Base years are also varying in different organizations.

DA & VDA usually the same thing - DA may be FDA or VDA but VDA is VDA. IDA is probably industrial DA if I am not wrong. CPI index published for different category of people for their different basket to determine the price index. There is one index for Industrial workers and the IDA which is again basically another VDA is reviewed based on Industrial Workers Index.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531
USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi
Dear colleague,

Mr S.K.Bandopadyay has aptly clarified the concepts of DA, VDA, and IDA

I would like to share , in general, about the DA iteself for whatever worth it is.
* The component of DA became part othe wage structure of industrial workers after huge price rise of essential commodities following the World wars and to protect in some measure the purchasing power of the basic wages from its erosion.

* The component got stuck in the structure thereafter and gave rise to variety of formula fuelled by Union demands and ingenuity of experts .

* Over the years, the need to neutralize price rise through DA , has acquired anamolous dimensions resulting in disproportionate DA amount , higher wages of workers than Supervisor/ Middle Executive etc.

* DA became bone of contention in negotiations with the Union's COD and various courts and the Supreme Court had to lay down principles of granting/ revising DA formula.

Vinayak Nagarkar
HR and Employee Relations Consultant

From India, Mumbai
DA- Dearness Allowance paid by the government to its employees as well as a pensioner to offset the impact of inflation on effective salary which varies from employee to employee based on their presence in the urban, semi-urban or rural sector.

VDA- Applies to the employees of the Central Government under six month revision plan as per Consumer Price Index remains fixed unless the government revises the basic minimum wages.

No Idea About IDA.

Thanks & Regards,
Sumit Kumar Saxena

From India, Ghaziabad
Dear Sir,
I have query about DA. As per law DA is not applicable for employees if their drawn salary is more then minimum wage.
We are giving VDA to our staff & workers & have stopped VDA to the staff & are planning to stop DA by next year when demand period completed.
Please advise what step we have to do.
Sanjay Tiwari

From India, New Delhi

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